Thursday, June 26, 2014

Workers of All Lands Unite

Left in London

Tourism is a not always about  beer and pasta or museums.  In London, with its long history of capitalism and labor, there are other things to investigate.  A few days ago, Russell Brand stood before a crowd of 50,000 anti-austerity campaigners in Trafalgar Square and called for a ‘peaceful revolution.’   In fact, it is difficult to be in London for any period of time without running into something political.  Protesters drinking bad English beer in the Albany pub notified us that rallies were going on in Trafalgar. 

Or you could drink in the pubs that Orwell frequented – the Dog & Duck or the Newman Arms.  He must have drunk as much as Hemingway.  By chance, drop into an art gallery in the Brick Lane area, the Whitechapel Art Gallery, and see a free show of 40 years of protest photography and film by Chris Marker.  Pictures of Che’, filmed speeches by Fidel play on the wall to curious Millenials.  Brick Lane is also host to Pathfinder Books, upstairs from a bar, whose aging comrades were waiting for their leaders to return from Oberlin.  I told them the Socialist Workers Party in the U.S. almost never collaborates with the any other groups – they are even absent from the anniversary planning of the 1934 Teamster strikes in Minneapolis.  Strikes they led at the time.  The two old comrades could not process the information and instead tried to sell me a very nice Pathfinder paperback.  

Or journey to the theatre environs.  The Young Vic staged a play by an exiled Bylorussian troupe, called “Red Forest” after the reddened trees of Chernobyl.  The play tracks, in a clichéd way, miseries around the world – the tsunami in Japan, polluted rivers in Brazil, Native Americans deprived of their land, the meltdown at Chernobyl, all through the narrative of an African refugee woman trying to get into Europe through Morocco.   Of course, these young actors had no solution but the appearance of two white buffalos as symbols of ‘hope.’  Or the dark farce, “A Small Family Business” at the National Theater that highlights the role of greed in leading a small capitalist family, who owned a furniture firm, from conventional morality to murder and drug running.  Must keep the Porsche, stereo component system and yacht in order!

The Clerkenwell area of London was at one time outside the walls of the City, and for that reason attracted rebels like Wat Tyler, the Chartists, the Tolpuddle Muddlers, various Fenians, William Morris’ 20th Century Press and then Vladimir Lenin, who edited Iskra out of the Press building.  It is now the Marx Memorial Library at 37 Clerkenwell Green.  Across the street is the Crown Tavern, where the Russian Social Democratic Labour Party held their 2nd convention, upstairs.  This is where the Bolsheviks became the majority in the party.  Even today, Mayday marches start on Clerkenwell Green.  The library now houses a vast collection of mostly Communist Party materials, as well as the largest library on the Spanish Civil War in English and some colourful murals.  The genial retired comrade who escorted us around also showed us a chess set by Rodchenko and Lenin’s tiny workroom.

Class issues also exist at the Tate Modern art gallery, located on the south bank of the Thames.  A display of revolutionary Soviet posters, some very well-known, are on the same floor as the Picassos and Tanqueys.  A large portrait of Trotsky is in their center.  Dissident Russian architect Brodsky has a display on the second floor of extraordinary 'imagist' architectural designs. On the next floor is a large painting on Vietnam modeled after Guernica. Yet as you go 'up' in the Tate from the crowded lower floors of cubism, constructivism and surrealism, to the upper, more empty floors of abstract, then post modernist, minimalist and 'display' art, you can see the decay of 'western' or 'capitalist' art more clearly, ending in almost completely black or white canvases.  People are absent, not just looking at the art, but 'in' the art too.  Realism has been left far behind.  Above that is the gift shop and the 'member' club, and perhaps above that, the permanent collection of 'Nothingist' art - an empty floor.

The June 30 and July 2nd 2014 London Evening Standard, a widely-read Tube newspaper,with advertising from the real estate industry, had these two stories about London being the "Hunger Games" capital of the UK.  London is far ahead of every other city in the UK in terms of wealth and jobs.  What mainstream paper in the U.S. would even mention that New York or San Francisco were the 'Hunger Games' capitals of the U.S.?  None.
Lying just north of the main part of London is Highgate Cemetery, which you can reach by a Zone 2 pass on the Underground to Archway, then a short bus ride up the hill to Waterlow Park.  Walk west through the park to the southwest corner and you will come to Highgate Cemetery, now taken care of by a Trust.  Located there is the massive grave marker for one of the founders of communism, Karl Marx, buried with his wife and other family members.  This marker was commissioned by the British Communist Party in a new location, as Marx was originally buried in an unmarked grave a short distance away.  His family had no money for a headstone.  Buried a short distance from his memorial are other Marxists and radicals – leaders of the South African, Iranian & Iraqi Communist Parties; Eric Hobsbawn, the famous English historian, Paul Foot and other Labour Party radicals.  Also in the cemetery is Vanessa Redgrave’s father, the folk singer Bert Jansch, the philosopher Herbert Spencer and the female writer George Elliot, as well as many progressives. 

The quote on the memorial is: “The philosophers have only interpreted the world in various ways - the point, however, is to change it.”  Marx is buried in England because he was a refugee from Europe, and because he did his most close work examining  British capitalism, and from it, capitalism in general, in and around London. 

(reviews of books by William Morris and George Orwell, below)
Red Frog
June 26, 2014

Thursday, June 19, 2014

Whereas Our Hero Falls a Bit Flat

"Capital in the 21st Century,” by Thomas Piketty, 2013 - Second Review - Part of Chapter III and Chapter IV

Piketty certainly needs an editor.  After all, repetition must be the god of his understanding.  It is more common in the latter part of his book. Lord!  In this part, he turns his attention to inheritance, the reason for the decrease in inequality from the turn of the century’s astronomical levels, and its prospects for rising further.  The last section is where he advocates solutions that are mostly left social-democratic. What is interesting about his ‘tax on wealth’ solution is that he himself calls it ‘utopian’ – much as actual socialism is also called ‘utopian.’  While various American reformists like Dean Johnson issued laundry lists of legal restraints on capital to criticize Piketty, Piketty in a sense dismisses them all as not getting to the heart of the issue. And that involves an international solution and a more complete solution.  A wealth tax has aspects of a transitional demand.  Which shows that he is actually more perceptive than the left/liberals in the U.S. who peddle a version of ‘humane’ capitalism, tinkered with by purely nationalist means.  His wealth tax would actually have to be applied across regions, then globally, to work.  And that leaves the door open for a Marxist, internationalist approach, as capital cannot cooperate on that level. 

Piketty’s analysis is heavily grounded in history and resonates with our common, though anecdotal, knowledge. For instance, his statistics bear out the fact that the newly-settled U.S. was for a long time more egalitarian than Europe.  He also comments that the South was the most in-egalitarian place in the U.S. during slavery.  This heritage still resonates in the south and accounts for the servility of so many southern whites.   It is also refreshing to read something that is primarily based on non-U.S. statistics – France, England, Germany, Japan and Sweden figuring prominently - with the U.S. only one among many.   

IMPERIALISM

The question of modern overseas earnings from corporations is not addressed.  Determining the amount of international business and profit that a ‘domestic’ company earns from its overseas retail, factory and land holdings, labor force wages and contracts with others would take significant research into each major capitalist firm to establish a pattern.  Piketty says that most profits now accrue from financial and overseas sources because domestic industrial capital is not that profitable, but he does not flesh out this view. Piketty can easily see in 1910 tax records holdings in sovereign debt bonds – Russia was one – and stock shares in clearly colonial companies like the East India Company, the Hudson’s Bay Company, the Panama or Suez Canals, or land holdings in a tobacco plantation in Jamaica.  Imperialist earnings for the 1% and the 10% are now hidden under the rubric of ‘domestic’ value in firms like GE, Wal-Mart or Archer Daniels Midland.  Shares in India’s Tata corporation will not show the 80 countries they invest in.  Invisibly, capital reaches around the world. So this book does not give us the wealth earned through imperialism, nor is that its intent.  Yet as such, it can delude the reader as to global sources of U.S. and European wealth.

Due to perhaps a lack of good statistics, he – unlike others – thinks the U.S. is more unequal than India or China or other ‘developing’ nations.  However, others have come to the opposite conclusion. He estimates that the upper centiles in poor countries – India, South Africa, Argentina, Columbia, China, Indonesia - control as much as in rich countries.  He doesn’t join the Bloomberg chorus of trying to describe the Chinese rich like the American rich, as China has more capital controls on incoming and outgoing assets, as well as a non-convertible currency.  As such, the Chinese rich are under more controls.

Piketty primarily accounts for the decrease in absolute inequality from the past, 1910 and earlier, due to the institution of progressive taxes – on estates, income, capital gains, interest, dividends, real estate, etc. and even capital in general.  This has resulted in less wealth by the dominant class as a percentage, and more by his oddly-named ‘patrimonial’ middle class – patrimonial meaning ‘inherited from a father.'  When you hear the common refrain of the ‘hollowing out’ of the middle class, the ‘destruction’ of the middle class, this is the modern reflection of this intermediate strata between big capital and the working class that became larger in the 20th century.   

In the 20th century, Piketty’s charts show 1910 to be a high point of wealth, with 1950 as the year wealth began to climb again.  The 1970s are the beginning of the true counter-offensive to return wealth to its normal position, when it starts rising more quickly.  In these sections, his special focus is on inheritance.  Inheritance is a somewhat forbidden topic, as it concerns death and deep family issues.  Americans don’t like to talk about it.  Yet Piketty isn’t hiding the green laundry. At present, pre-death ‘gifts’ to children are almost half of all inheritance.  Due to parents living longer, most inheritance occurs for children in their 50s, not their 30s - which accounts for more focus on ‘careers,’ even for middle-strata children.  One of the signs of growing inequality is that old people die far wealthier than the living, which is the effect of asset compounding.  Or, more pithily, the ‘dead are worth more than the living.’  Piketty here punctures another economics’ class fallacy – the “Modigliani triangle,’ which asserted that all old people save for retirement and die with almost no money.  Many do, of course, but the upper classes certainly do not.  His charts show that inheritance is a chief transmitter of inequality between the classes, and it is rising. 

Piketty’s charts show that inheritance was 25% of national income at the height of inequality in 1910, and that if present trends continue, it will reach that level again.  Using mostly French figures, Piketty estimates that inherited wealth in the 19th and early 20th century was 80-90% of wealth.  Right now it is back up to around 72%.  This, again, is based on returns on capital outstripping actual economic growth.  The latter helps young people, the former older people. 

I am going to list certain points I find interesting, though there is of course much more.  I’m going to quote from the ‘left’ Piketty the most. 

  1. He continues to dwell on literary descriptions of inequality in the 18th and 19th centuries and especially focuses on Balzac’s “Pere Goriot” which has a key scene in which one of the nastier characters, Vautrin, advocating marrying rich instead of working because it is far more profitable.  Of course this reflected the time perfectly.  Even now there is still the ‘gold digger’ as a type, though it should not be limited to women.  “Sense and Sensibility’ and ‘Washington Square,’ by Henry James also figure prominently.
  2. The richest 10% in the U.S. accumulated 75% of the growth from 1977-2007 through both income and holdings. 
  3. Artists, actors, athletes make up less than 5% of the top earning group. ‘Super-managers’ as Piketty calls them, make up the rest. 
  4. “The relative power of different social groups often plays a central role in determining what each worker is paid.” Piketty then echoes the Democratic Party line that ‘education and technology are the decisive determinants of wage levels.’ These statements contradict each other.
  5.  “Inequalities at the bottom of the wage distribution have closely followed the evolution of the minimum wage.”  This highlights the importance of the minimum wage. He thinks firms unilaterally setting wages is inefficient and arbitrary. 
  6. While Piketty feels that ‘education’ is key to solving inequality, he cannot track any present relation between growing educations and growing incomes.  He discusses how top schools filter out students from the lower classes; how ‘super-managers’ are compensated, not by productivity, which is hard to measure, or profits, but by a ‘buddy system’ of cronies. He mentions the role of ‘luck’ and the role national differences play in compensation - even though technology and education are similar across many countries.  He concludes that the top levels in society are not earning what they earn due to meritocratic skills in technology or education.  He says it is more ‘hand in the till’ than ‘the invisible hand.’
  7. Wealth is hidden by bad or inadequate tax statistics by national governments.  Obviously in league with capital.  This is especially a problem in countries like India or China. 
  8. Household surveys used by the World Bank etc. to estimate wealth are misleading, as they are based on self-evaluations.
  9. His ‘essential’ point is that the progressive tax policies instituted in the face of World War I and the Bolshevik Revolution are why inequality is not as great as the sky-high levels of 1910 Europe.  He especially uses very detailed French records to prove this point – themselves products of the 1789 French Revolution.  (A Revolution which also ended the older son inheriting estates, and instead mandated distributions equally to all heirs.)  The U.S. was a leader in instituting very high, progressive tax rates, especially under Franklin Roosevelt.  This also benefitted the rise of a larger middle class.
  10. “…conditions are ideal for an ‘inheritance society’…”  His estimates are based on the supposition that a revolution will not alter the wealth of the capitalist class.  In 1910, 25% of capital flow was from inheritances, a massive amount.  In France in 1910 the inheritance component of wealth was near 90%.  Now it is 72% and he predicts it will return to over 90%. 
  11. Galbraith wonders where Piketty gets his ‘return on capital’ figure averages of 4-5%.  Well, Piketty has charts of them from his tax studies.
  12. “Clearly, equality of rights and opportunities is not enough to ensure an egalitarian distribution of wealth.”   Equality before the law, of course, is the only ‘equality’ permitted by Democrats.
  13. “Super-managers’ also become ‘petit rentiers’ with their earnings, i.e. accumulating more and more wealth that just earns income.  “The entrepreneur always tends to turn into a rentier.’ 
  14. The wealthy in the 18 & 19th centuries had servants and ‘staff.’  From what I can see, today’s middle class apes them by hiring contractors to do almost everything, eats out to gain a cook, dishwashter and servant, and shuns ‘menial’ labor or repairs. 
  15. He points out that a ‘meritocratic’ society’s philosophy is harder on those who do not do well than a patrimonial society, because the ‘losers’ have themselves to blame. 
  16. “…one-sixth of each age cohort will receive an inheritance larger than the bottom half of the population earns in a lifetime.”
  17. “Rent (of land or housing) is not an imperfection in the market; it is rather the consequence of a ‘pure and perfect’ market for capital…”
  18. “…real democracy and social justice require specific institutions of their own, not just those of the market, and not just parliaments and other formal democratic institutions.” This goes far beyond Democratic Party 'liberalism' or even left-liberalism.
  19. Wealthy people earn more with their money than those with less wealth, due to ‘economies of scale’ for those investors.  I.E. they can take more risk, can hire better experts, can purchase more profitable investments.  As a result, their earnings, as reflected in tax records, university foundation earnings, the Forbes billionaire list, sovereign wealth fund earnings and the global wealth reports on ‘high net-worth individuals’ can be up to 8-10% per year.  Compound these earnings and you will get an idea of what is going on.  Due to this process, Piketty estimates that the top 1000th of the world wealthy could end up owning 60% of global wealth.  “…which is hard to imagine in the framework of existing political institutions unless there is a particularly effective system of repression or an extremely powerful apparatus of persuasion, or perhaps both.”  Welcome to the new world order!
  20. “…the entrepreneurial argument cannot justify all inequalities of wealth…”  See Bill Gates.
  21. “Property sometimes begins with theft.”  Piketty moderately echoing Prodhon's “Property ... is Theft.” Which shows what a moderate fellow Piketty is.
  22. “…the main effect of inflation is not to reduce the average return on capital but to redistribute it.”  Piketty points out that inflation hurts the less wealthy and benefits the more wealthy, redistributing money upwards.
  23. Saudi Arabia buys low-earning U.S. government bonds in exchange for (military) protection.
  24. “… petroleum rents might well enable the oil states to buy the rest of the planet…and to live on the rents of their accumulated capital.”
  25. Figures on the global balance of payments is negative, when it should be perfectly equal.  Piketty thinks the best answer as to what happened was that the hidden assets are in tax havens.  (Duh!) This ‘dark wealth’ amounts to nearly 10% of global GDP.
  26. “…the upper classes instinctively abandoned idleness and invented meritocracy lest universal suffrage deprived them of everything they owned.”

Piketty marshals his arguments for a ‘global wealth tax’ by first calling for economic and financial transparency as absolutely necessary to understand what is going on.  Which is also the first demand in the Transitional Program of the 4th International – simplified as “Open the Books!”  Hiding income in tax havens or fake entities, bad or incomplete statistics, fake prospectuses or accounting reviews, non-cooperation across nations - all help the capitalists hide their wealth.  He also recommends increased spending on colleges, to allow other classes than the rich get good educations.  In his disquisition he discusses the increased role of the state in the financial system.  To him the three pillars of the ‘social’ capitalist state that developed in the 20th century were based on health, education and social security/pensions.  The older role of the state – called ‘regalian’ in his terminology, which I think is incorrect – was limited to police, courts, army, foreign affairs and some administration.  This is the conservative doctrine of the state.  He does not think this ‘leap’ towards a greater ‘social’ capitalist state will be repeated – unlike the sentiments of many left-liberals, who are nostaligic for the Rosevelts. 

Piketty sees this ‘global wealth tax’ as the only way to really undermine inequality, as the issue is now international, not national.  A tax on oil proceeds would especially affect the autocratic rulers of the petro-states.  Piketty feels that regulations of capital flows can impede the process, but do not actually address the fundamental problem.  He insists that it is fairer than the present ‘real estate,’ income and consumption taxes because it gets at the hidden assets of the wealthy.  As it is, 'wealth' per se is not taxed in hardly any countries.  Piketty also thinks that labor migration can even out inequalities.  Yet this dovetails with capital’s need for fluid labor that can easily cross borders.  This does not change the rulers of either the country arrived at or the country left.  In fact it probably just makes them both wealthier.  Public debt can be reduced through austerity, inflation or a capital tax, and the latter to him is the best for the working classes.

Piketty acknowledges that a ‘global wealth tax’ still recognizes the capitalist system and the market, and he thinks this ‘compromise’ makes it desirable.  That was his explanation for the success of progressive income taxes initially.  Even the right-wing agreed with them at that time!  Prior to 1910 taxes were almost nil on any wealth.  Of course, these taxes were initiated under the shadow of labor rebellions, revolutions and strikes around the world.  Paying for WW I was also a necessity.  In essence Piketty claims this is the only way to save capitalism, as his book is peppered with warnings about its possible overturn because of inequality.  Marxists solved the problem of inequality in a ‘logically consistent’ way, in his phrase, but he doesn’t want to go that way.  So he’s picking the more ‘illogical’ method.  He calls for a ‘democratic control of capital’ which is a contradiction in terms, but says there is no other solution.  Capital, after all, is based on the exploitation of the majority of people.  The ‘democratic control of capital’ would actually mean its abolition. 

Red Frog
June 19, 2014

Saturday, June 14, 2014

War Propaganda Entertainment

"Lone Survivor,” Film by Peter Berg, 2013

This film is eerily similar to the 2005 Russian one on the Soviet war in Afghanistan, “The 9th Company.”  It is better than this American version, as it is not as ‘gung ho.’  The soldiers talk about their doubts about the war.  It includes an astonishing scene where the Soviet commander tells his soldiers that they do not have to go to Afghanistan if they do not want to.  In reality, the Soviet company lost 6 dead, 39 wounded and defeated 250 mujahedin, though that film reflects worse damage.

“Lone Survivor” is a ‘true story’ about a group of 4 American Navy Seals on patrol, scouting a village where the Taliban might be.  They are surrounded by Taliban, and only one survives – who just happens to be played by Mark Wahlberg, likable Boston tough-guy.   The key scene is a debate in which the soldiers argue over what to do with 3 goatherds from the village who have accidentally come upon them in the mountain.  The three – a young man, a boy and an old man – have ruined their mission by discovering them.   One Seal says, “kill ‘em all.”  Another says, ‘tie ‘em up.’ (where it is alleged they may die of exposure on the mountain.)  And the commander – perhaps humanely, or over-humanely – says ‘let ‘em go’ and we’ll get out of here.  One solider comments from the looks the 3 give the Seals - ‘they hate us’ – which might tip us off as to what is going to happen.

What happens is that the young man quickly plunges down the mountainside like a goat on fire to warn the numerous Taliban below, who then move up the mountain to find the American patrol stuck on a high ridge, with no way to get away.  Their military radio has been malfunctioning since the day before, so they cannot get timely air support.  A fight ensues, many Taliban die as in ‘cowboy and Indian’ movie, all by clean shots, and the Americans, as the battle rages, repeatedly fall down the mountain on large rocks.  This shattering of bone and flesh is gruesome.  The bloodied American soldiers die one by one in somewhat heroically stupid moves.  Retreat or not retrieving the body of a fallen comrade are not options evidently. At some point, a call gets through and air-support shows up, though one copter is brought down with a surface-to-air missile.  (Some of which the U.S. donated to the mujahedin during the war against the Soviets…)

The ‘soft-hearted’ decision by the patrol commander to not restrain the goatherds in any way becomes the key mistake.  Of course, you might wonder what we are doing in their country anyway, but that is not the subject of pro-war movies like this that make out Americans to be kind and heroic, and also really effective killers.  Showing Americans being hurt also hides the fact that many more Afghan and Pakistani civilians, goatherds, Afghan soldiers and Taliban have died in this war.  The Taliban and “Al Qaeda” are interchangeable.  This is a clear propaganda film.

Eventually the one soldier played by Wahlberg is pulled out alive.  How this is done is central.  He is discovered hiding and bleeding by the head of the villagers, who hate the Taliban (quite rightly).  They shelter him in their wattle houses as a sign of Islamic courtesy, and chase the Taliban out of the village with AK-47s.  The Taliban retreat and return with a larger force, fighting the villagers and looking for the U.S. solider.  At just the right moment, U.S. helicopter gunships arrive and strafe the Taliban, killing many and forcing their retreat.  The soldier owes his life to the village elder.  In real life, they also had a reunion. 

It is obvious why this film has been made.  To show the Americans as the victims.  To show that all Afghans do not like the Taliban – our enemy.  And to show that Afghans will even ‘ally’ with the U.S. – even if it puts them in danger.  It is essentially a film that supports our invasion and more than 13-year occupation of Afghanistan, disguised as a small story of warrior heroism.   Some might say, 'but its a true story.'  The question is, of all the 'true stories' of this war, why this one?

Red Frog
June 14, 2014

Wednesday, June 11, 2014

Quantity turning into 'Quality'?

A Fascist Edge

Something is happening here.  In the U.S. that is.  Given the somewhat constant barrage of shootings by isolated right-wingers in this country, it may be that some kind of ‘quantity into quality’ moment is approaching.  Or 'quantity into big shit.'  In the last few years we have seen the killing of abortion doctors, random civilians, people at a Jewish museum in Kansas by a white fascist, the slaughter of Sikhs in a Wisconsin temple by a known skinhead, and the recent Cliven Bundy standoff.  Two weeks ago some male-rights rich kid in California decided to take revenge on women by killing 3 of his male roommates, among others.  In Texas groups of reactionaries have carried guns into chain restaurants, scaring families and children, and threatening anyone who doesn’t like their kind of ‘activism.’  A week ago some natural-law ‘Sovereign Citizen’ type tried to take over a courthouse in Georgia, killing one person.  Now we have two Patriot Militia types killing two cops in a café and an armed civilian in a Walmart in Nevada.  Both had been to Bundy’s compound in Idaho, which is considered by the Right to be a giant victory. 

As the Buffalo Springfield sang, “Somethin’s happenin’ here, what it is - not exactly clear.  There’s a man with a gun over there, tellin’ me I got to beware…”   

Whose holding the gun this time?  The first time I saw this was at an Obama appearance in 2008 in Minneapolis.  One T-Party middle-aged white male carried his legal handgun to the event as part of a ‘protest.’  The point of this was intimidation, though one punk from Anoka County didn’t scare anyone.  But that is what we are getting here.  Eventually if carrying assault rifles in public anywhere becomes the norm, what about a group of armed right-wing thugs showing up at an anti-war event?  A strikers picket line?  A pro-abortion defense group? A welfare-rights rally?  You get the picture.  One day one of these guys will use his gun in the heat of the moment.  And then here we go.  Because they are not the only ones armed. 

Of course, an attack could come from a lone gunman too. 

The T-Party has a fascist-in-the-egg wing, no doubt about it.  It has been hatched by big money, nurtured by rural poverty and mothered by the decline of small businessmen.  In the southern and western U.S. it is especially easy to find these reactionaries.  They are not, for the most part, a product of big cities or inner suburbs, but the exurbs and small rural towns of the white world. Nor are they for the most part working-class people, in spite of much middle-class liberal hand-wringing about that.  Nationalist, Christian, white, male chauvinist, pro-small business and racist, they are a constant of the American political scene.  The Ku Klux Klan, the ‘50s Minutemen and their modern border-guarding reincarnation; the John Birch Society, the Silver Shirts, the Know-Nothings, Christian Dominionists, neo-Confederates, militia patriots, the American Legion, the followers of Father Coughlin and Rush Limbaugh – same deal, different decade.   

Fox News broadcasts daily diatribes about how Obama is a dictator, a communist, a socialist, a fascist, a Marxist, a … Negro, and ‘Mericuh is finished.  Goebbels would have been envious of such a mouthpiece.  Is every right-wing lone wolf in the U.S. going to kill someone now?  Did some kind of ‘call’ go out, only heard by those with tinfoil hats emblazoned with “Don’t Tread On Me?” 

At some point sooner than we think this kind of violence might spill over into something that is not isolated.  It is not just some kind of injured white male vanity here, though that plays a role.  ‘See, look at my gun, look at how powerful I am!’ (The thoughts of a secret weakling…)  It is meant to cow the population into doing what the ‘men with guns’ want.  There is also a veneer of incompetence.  Armed to the teeth, tons of bullets and equipment and planning, they have not been very ‘successful.’ These last two shot themselves for some unknown reason. The intimidation is not working very well so far, as people are getting scared, then angry.  So there might be an escalation in sight. Fascism actually makes the majority of the population their target.  The history of right-wing terror in Europe is full of attacks on soft civilian targets like trains and public events – similar to the one at the Boston Marathon, or the bombing of the Murrah Federal building in Oklahoma City

If that happens, then leftists need to be prepared.  No doubt the government will attempt some kind of ‘law enforcement’ moment.  Which worked really well in the Cliven Bundy case.  Even though right-wing ‘terrorism’ has been identified by the FBI and others as more dangerous than anything else, it is still ‘Muslims’ that are almost the only target of our forces of 'law and order.'  They shut down their task force on right-wing violence on 9/11/2001, and only a few weeks ago decided to start it up again. For those of you that are counting, almost 14 years asleep.  According to CJ Werleman, in the years 1990 to 2010, there were 145 acts of political violence committed by the American far Right, resulting in 348 deaths. By comparison, 20 Americans were killed over the same period in acts of political violence carried out by Muslim-American civilians.  This does not include 9/11. Many in the police community sympathize with the proto-fascists, so do not fool yourself into thinking they can stop a full-fledged movement if it bursts into the open.   Or even just one isolated lone fascist.  They are just going to let it happen.  Like they pick up the bodies in the poor neighborhoods of town every morning.  

As the Boy Scouts say, be prepared. Remember Robert Williams, the Deacons for Defense, the Teamster Union Guard and Malcolm X.   The right of self-defense is non-negotiable.

Red Frog
June 11, 2014 

Friday, June 6, 2014

Every Week its Like This!

12 Short Takes on Our Sorry World

  1. Kettle and Pot.  Obama again criticizes Putin for ‘interfering in Ukraine.’ 
  2. War-monger / profit-monger. McCain wants to privatize the VA.  His party has been solidly behind every war and every government cut-back, creating an over-worked and swamped VA.  Perhaps this was the point all along?
  3. Sin of Omission.  Americans again told that “D-Day” was the beginning of end for the Nazis.  There does not seem to be a ceremony commemorating Stalingrad attended by Westerners.
  4. Don’t support this troop.  Soldier Bergdahl swapped for 5 Taliban illegally held at Guantanamo.  3 of the 5 had attempted to join the Afghan government before being arrested and imprisoned.  The other 2 surrendered.  Bergdahl made the mistake of believing the Afghan war was a mistake.  Only soldiers who fall in line with the rhetoric are supported.  Everyone else is a traitor!
  5. Just another rape and killing in India.  BJP governor of Madhya Pradesh says about rape -  ‘sometimes its right, sometimes its wrong.” I guess this is what you get in the ‘worlds’ largest democracy.’ 
  6. Really free money.  ECB imposes ‘negative interest rates.’ Which means the money is more than free. Tax-payers put profits directly in pockets of banks, as they lend that same money back to borrowers at higher interest rates.  Why doesn't the ECB lend directly to the people?
  7. Dope.  Maureen Dowd, upper-class NYT columnist, goes to Colorado and eats whole weed brownie for first time, gets unpleasant high for 8 hours, writes about it.  Rest of world laughs. 
  8. Blowback.  Official report states ranks of Al Quaeda-affiliated organizations have increased dramatically since our successful ‘war on terror’ began. 
  9. New cold war.  G-7 quickly kicks out “G-8.” Russia makes long-term deal with China for natural gas.  Which the Chinese should have done in 1971 under Mao instead of playing ping-pong with Nixon.  The conflict revives the careers of Yakov Smirnoff and other Russian émigrés.    
  10. Jail break.  A Mexican wolf escaped through a hole in the fence at the Minnesota Animal Jail – aka 'Zoo.'  The frightened wolf was shot and killed – not stunned – by zoo personnel who thought he might attack someone.  US records show that two humans have been killed by wolves in all of U.S. history. 
  11. Too big to jail.  Nearly 800 small skeletons were found in Ireland in a septic tank hole, the product of 40+ years of the Catholic Churches' tender care of 'illegitimate' children. Reports of the children's treatment include starvation, beatings, extreme cold and other forms of neglect. The Irish government was aware of the situation and also did nothing. 
  12. Deception.  Researcher who wrote a book about the subterfuges used during the Normandy invasion to dupe the Germans mentioned that in today's technology it would be far harder to fake a Calais landing.  When asked what the main form of deception that is used now, he said, 'The mass media."    
Red Frog
June 6, 2014 – D-Day.  

P.S. - regarding #11.  Now estimates are that around 4,000 children died in Irish Catholic 'homes' for unwed mothers, and were buried without Christian burials or 'baptism,' as they were the product of sinful unions.  Which is why the nuns could just throw them in holes.

Sunday, June 1, 2014

The Pale Marx

"Capital in the 21st Century,” by Thomas Piketty, 2014
Review of Parts I & II and part of III

This book has been reviewed more times than the Sopranos HBO series – and that is a good thing.  I am going to list some comments and then add my own. 

From the left:  John K Galbraith illuminated some of Piketty’s theoretical confusions in Dissent Magazine.  He points out that his idea of capital is based on market value, and combines all sorts of wealth as ‘capital’ - like land or housing.  Market values can plunge, yet the physical machines still exist, so basing an analysis on financial market value can be deceptive and an underestimate.  Galbraith calls Piketty’s confusion between market value and physical capital key. Galbraith, somewhat like basic Marx, narrowly identifies capital as what gave the capitalists power over the working class, which includes money or ownership of machines, in fixed or variable form.   He states that this book is not about ‘capital’ per se, but the value of assets, their distribution through time and the role of inheritance.  I.E. 'wealth.'   However, Marxists like David Harvey contend that real estate ownership (rent) and finance capital are part of the circulation of capital, and Marx understood this too.  Galbraith also goes into detail on the ‘Cambridges’ debate, showing that Piketty misrepresented that debate.  This is the best analysis I have read from a non-Marxist.

John Judis in the New Republic made fun of Piketty’s denial during an interview of having read Marx, as Piketty quotes from Marx in the book.  Thomas Frank in Salon pointed out that Piketty knows very little about U.S. political history and made several obvious mistakes.  Dean Johnson in the Huffington Post lists a raft of reforms that would ameliorate inequality, after Piketty admitted that he thinks his idea of a massive global wealth tax is ‘utopian.’  Doug Henwood in Left Business Observer attacked Piketty’s avoidance of Marx’s prescriptions for inequality – class struggle - as the weakest part of the book.  This has been echoed by other Marxists, including the Black Agenda Report. 

On the right:  The British Financial Times (The Wall Street Journal of The City!) predictably dissed Piketty for supposedly ‘making up his figures,’ yet with very thin evidence to support this libelous contention.  The FT got immediately slammed by a good number of economic thinkers. Piketty’s charts are on-line and can be examined by anyone.  Galbraith does say that he doesn’t know where Piketty got his ‘return on capital’ figures.  The Obama/Clinton neo-liberals attacked Piketty for ignoring transfer payments to the poor and working-classes in his analysis.  Piketty for the most part uses ‘pre-tax’ figures, but also has charts with post-tax.  However, the real argument here is that if he ignores ‘post-tax’ transfers to the working classes and poor, then he also ignores the ‘post-tax’ government transfers to the capitalists, which are far more immense.  I am tracking this issue in the rest of the text. 

I am not going to repeat most of these criticisms again.  Piketty is a mild-mannered social-democratic statistician who dearly wishes capitalism would work for everyone, but is honest enough to admit it doesn’t, at least not on the basis of equality.  Lurking in his text is the specter of Marx.  The title of the book – “Capital…” though not “Das Kapital” - is certainly clear enough.  Piketty deduces a series of ‘laws of capitalism' – much as Marx did – on the basis of his research.  His overall finding is that ‘R>G” (Rate of Return on Capital is greater than Economic Growth.)  His focus is nearly always on the ‘capital/labor’ split, something that Marx focused on too, though not in the same way.  Capital and wealth were two different things to Marx. Piketty's concern with facts - as was Marx's in his study of economic issues in the British Library – is also significant, though Piketty has the advantage of more years of data, more accessible by computer.  Piketty is honest enough to admit that Marx ‘was on to something’ regarding inequality and his immiseration theory, and even regarding the ‘falling rate of profit.’  He does think Marx’s ‘apocalyptic’ predictions have not come true due to productivity increases.  Piketty attacks American and neo-classical economists for their love of ‘simplistic mathematical models’ not based on empirical observation.  This parallel’s Marxist criticisms of the phony ‘science’ of economics, which has become more like a religion. It was called ‘political economy’ until the bourgeois neo-classical theorists got a hold of the discipline in the late 1800s, after which it was christened ‘economics.’  (See review of ‘The Invisible Handcuffs of Capitalism’ – use blog search box, upper left)  

It's almost like the social-democrats/left liberals now have their own 'mini-Marx'.  They have been searching for some kind of philosophy to combat libertarianism and market fundamentalism, and they feel they have found something close.

The Keynesians – even Galbraith - are thrilled that Piketty has provided nearly 300 years of statistics to bolster arguments about inequality.  These first sections are based on European & U.S. tax and estate figures, stock & bond prices, and macro and micro-economic national income data.  They indicate that capital's functioning over most of its whole existence essentially led to a hardening of the class system, a rise in inequality and over-accumulation by the 1%, and even the 10%.  Piketty is clearly congruent with the Occupy analysis that the ‘1%’ is the enemy.  Yet as a statistician he breaks the class structure down even more to deciles and centiles (10% and 1%) and even the .1%/.01%, so he gives a broader and more thorough picture of what is actually going on in society.  Simply put, the other 9% also gain economically.  As I’ve mentioned in the past, this layer of small businessmen, managers and professionals play a role as a social support to the 1% or the .1%, and there is a material reason for their support. 

In response to the Keynesians, Piketty points out that the only time that wealth did not continue its normal accumulation was in the period 1914 to 1945 – the period of two World Wars and the greatest Depression capitalism had ever seen. A period of revolutions, workers’ states and working-class rebellion everywhere.  In other words, the ‘leveling’ during this period was an historic blip – and the following short period of growth of the ‘middle-class’ is also looking like a blip.  Here again, this analysis is based on market values. Piketty clearly indicates that the long view does not give grounds for pro-capitalist Keynesian optimism.  His forecast is that if inequality continues at the present pace, it could possibly reach never-before-seen levels - in the U.S. 60% of national income for the top 10%.  Or it could just return to the worst levels in history, like la Belle Èpoque in the late 1890s or the Ancien Régime of France in the late part of the 1700s.  As he puts it, within the system, “…there is no natural, spontaneous, process to prevent destabilizing, inegalitarian forces from prevailing permanently.”  At present, from his numbers, the U.S. is the most unequal advanced capitalist regime.  

So that is the cheery news for those of us who live in a capitalist system, even from a social-democrat.  And that is most everybody right now. Let’s look at some specific points in these sections: 

  1. One of the deceptions of bourgeois economics, which Keynes also agreed with, was that the ‘capital/labor’ split was a steady number.  This was a theory developed by a fellow named Simon Kuznets.  This is still taught in econ classes as the ‘Kuznets Curve.’  Piketty shows that the ‘split’ varies based on the period of time, the country, etc.  In other words, gentle reader, it is a product of the strength of each class.  For instance, he points out that the split went towards labor at two times in recent French history – during the popular front of 1936, when working-class parties controlled the French government, and after the massive worker/student revolt in 1968, which raised the French minimum wage and gained workers many other benefits.   There were also wage increases after the 1789 French Revolution!  These advances are all now under attack, of course.  Witness the “Socialist” Hollande pleading with French workers to give up vacation time.   
  2. Piketty’s charts clearly indicate a very close relation between population growth and capitalist economic growth.  Which might indicate why wealthy people do not want to really limit population, and that should give environmentalists pause.   He also indicates that as population growth slows, the weight of inherited wealth increases.
  3. Piketty ignores the sources of profit from enterprises in his analysis of wealth, thus hiding the production of surplus value from rural and urban labor like the neo-classicists do. His definition of labor is any paid work, even by a capitalist or equities desk trader.  This of course hides the Marxist definition of labor, and mixes the earnings of corporate leaders with janitors. Yet he does also show the inequality of labor in his charts.
  4. Something which might be dear to the hearts of Monthly Review (“MR”) readers, Piketty shows that an economic ‘low growth regime’ or stagnation results from high inequality.  He has not seen any growth above 1.5% over the long-term.  The MR tendency has made stagnation a centerpiece of their analysis of oligopoly and financialization. 
  5. Piketty in these sections describes the role of colonial assets as very significant during the early part of the 20th century for certain classes in England, France, etc.  But after the anti-colonial struggles, the value of ‘out of country’ holdings decreased to insignificant amounts.  He thinks ‘cross-ownership’ between the major capitalist economies is a wash.  He does say that Africa has the most foreign ownership, at 20%, and perhaps 40-50% of African manufacturing is owned by foreigners.  (See review of book, “The New Colonialism,” below)   I am waiting to see if he negates imperialist earnings overseas in his discussion of ‘net foreign capital,’ though he suggests that “in wealthy countries, net income from abroad is generally slightly positive.”   I am not optimistic.  It is doubtful that tax records for ‘developing’ countries are very accurate at any rate.  Or that we can infer how much of the stock price of General Electric is based on ill-paid factory workers in China, or the pollution of their environment.
  6. For many years, income from government bonds and land provided a stable income for the propertied classes. He uses Jane Austen, Balzac, Henry James and other writers to indicate this stability.  (He also references Germinal, Oliver Twist, Les Miserables, Swann’s Way and other novels, showing that ‘fiction’ is not really fictional. And reflecting that perhaps ‘non-fiction’ is very many times a distinct form of fiction!)  What happened in the 20th Century is that the value of land decreased, and the value of stock / corporate ownership increased.  Class-wise, this meant sunset for the rural landed aristocracy.  Wealth moved to those holding urban real estate and business ownership instead.  Labor, rural & urban land and buildings, stock/bond and corporate ownership – and of course nature itself - are the sources of wealth in a capitalist society. 
  7. Accompanying this change in the 20th century was a growth in the role of a certain segment of ‘labor’ – the rise of a new class of managers and professionals.  This is one of the reasons for the ‘euthanasia of the rentier’ – rentier being someone who lived off stable government bond interest or land rent paid by tenant farmers.  The rise of a larger group of people living off higher salaries has changed the nature of both wealth and class.  It was the gateway to a sort of propertied ‘middle class’ (which he calls ‘patrimonial’) that never existed in the 18th and 19th centuries, where it truly was the rich and everyone else.  He calls this development ‘fragile.’ 
  8. Piketty is very careful in qualifying his statements, so does not come across as too bombastic.  He even makes the obvious point that basing figures on tax records can be incomplete because of a long history of tax avoidance schemes by capitalists.  He assumes that this avoidance has been at the same level throughout history, and says inequality is worse than his statistics show.  However, I think there are very good indications that international tax avoidance is at record highs.  Recent figures out just a few days ago show that many large American ‘name-brand’ corporations like Honeywell and Citbank hide their profits overseas.  It stands to reason that international capitalist organizations, in an interconnected world, might have more ability to do this than in the past.
  9. ‘Intellectual capital’ is a phrase that can be seen as just another way of saying ‘labor skills’ or even labor power.  It reflects the capitalist colonization of the very term, ‘labor.’  The World Bank has recently estimated the value of ‘human capital’ as more valuable than 'money capital,' but Piketty does not follow up on this insight.  Piketty is not as astounded as the World Bank, as he contends labor has had a higher share of national income than capital's earnings since the 18th century, though that share is getting smaller. Of course this is his definition of labor, which includes all wages and salaries.
  10. Piketty savages the simple “Gini Coefficient’ – the latest trendy inequality measure – as hiding the distribution and the location of inequality. He calls it ‘abstract and sterile.’  He prefers his decile distribution charts as a more accurate measure.  He also questions other ‘official’ reports on inequality from the OECD and national statistical agencies as deceptive. 
  11. Piketty indicates that, while older people have more wealth than younger people, within each generational cohort the wealth gap is replicated.  So ‘generational warfare’ is a red herring. 
  12. He quite clearly shows that the U.S. Civil War resulted in the expropriation of millions of dollars in slave capital from the planter aristocracy, a value that rivaled northern industrial or land value.  There were 3.5-4M slaves in 1860.  Piketty thinks modern U.S. attitudes towards inequality, especially in the south, have been influenced by slavery to this day – which is extremely accurate.
  13. Like nearly all ‘western’ economic analyses, he mostly ignores the role of the workers states in the 20th century.  They amounted to almost 40% of world production at one point in the 1980s. One of his charts on 20th century world output makes them invisible.  However, he recognizes that the dissolution of the central European and Soviet workers states privatized a vast amount of ‘public capital’ and put it in private hands. (Isn’t it odd that the imperialist left-liberals who oppose privatization in the U.S. and other countries were all for it when it came to the USSR etc.?)  Piketty calls it the most extensive privatization in capitalist history. The smaller waves of privatization across the world since the 1980s have increased the wealth of the capitalist class, a process still relentlessly going on. 
  14. He is very careful in his categories to be as ‘real’ as possible, for instance describing wealth with and without ‘durable goods’ (cars, appliances, clothes etc.) or ‘actual purchasing power” – what you can actually buy in each country, not just based on exchange rates.  Both these issues are familiar to any working person.
  15. Inflation in his view saps fortunes, reduces inequality, and reduces public debt, and has even been used by governments for the latter purpose.  Piketty does not question the oft-manipulated inflation statistics. 
  16. Government wealth ‘averages’ hide class holdings.
  17. Government debt enriches private entities who hold the debt, or the banks who loan money to the government.  I.E. the taxpayer is funding the bond owners and bankers.  War is paid for by public monies. Piketty mentions that Marx also saw public debt as a tool of private capital.  This contradicts the views of the Keynesians.  As we saw in the recent Great Recession, trillions in public debt was taken on to float private banks.
  18. Piketty addresses the myth of the meritocracy based on education, calling it part of the ‘apparatus of justification’ for inequality. 
  19. Piketty never mentions the value of ‘free’ labor in the home as part of the reproduction of the working class, but he has an idiotic section about the work that goes into managing your financial assets as a rentier.
  20. The higher you go in income levels in the top 10%, the more stock/bond earnings and corporate ownership play in wealth.  At the very top levels – the 1% and the .1% and the .01%, it far outweighs wealth from any kind of labor.  And here you have who owns the ‘ownership’ society. 
Unlike the Marxists dismissing him as dreadful reformist pond scum and the right-wingers thinking he is the return of Joseph Stalin, Piketty’s role is quite different.  In these sections at least he has supplemented in an intellectual way the original discussion recently started by Occupy.  His book introduces certain categories that Marxists are familiar with, but to an audience that is somewhat unfamiliar with them.  European social-democracy is ahead of the swill from normal U.S. ‘progressives,’ who think single-issue struggles or the culture war are the cutting edge, or who think a party labeled 'Democratic' really is.  In a way, it represents a theoretical breakthrough for many people who were not conversant with much of a class analysis.  Piketty’s book can be used by the socialist movement in the U.S., which can amplify his critique and correct his shortcomings.  Ultimately his factual position undermines some of the happy lies of capitalism, and exposes its perfidious raison d’etre - the ruthless pursuit of money by a class of rotting elitists, who more and more resemble Louis XIV and his court.  Reformists might also use his arguments, but their own pro-capitalist love is undermined by this part of the text.

The rest of section III and section IV will be reviewed later.

Red Frog’
June 1, 2014